Legislation

* § 1009. Registration. (a) Except as provided in this section, no
person may engage in litigation funding in this state without being
registered with the department. The registration requirement shall not
apply to a banking organization as defined in subdivision eleven of
section two of the banking law or a licensed lender licensed pursuant to
article nine of the banking law.

(b) An application for registration shall be filed in the manner
prescribed by the superintendent and must contain all the information
required by the department. The application shall be accompanied by a
five hundred dollar fee. The superintendent shall have the power to
approve or deny a registration application, based on whether such
application is complete, accurate and otherwise in compliance with
applicable laws or regulations.

(c) The superintendent may revoke or suspend the registration of any
litigation funding company if, upon notice and a hearing, the
superintendent determines that the litigation funding company or any
member, principal, officer, director or controlling person of the
litigation funding company has:

(i) committed a violation of the insurance law, banking law or this
chapter or any regulation promulgated thereunder, an order or subpoena
of the superintendent or the head of another state's insurance, banking
or financial services regulatory agency or federal agency with authority
to regulate litigation funding companies, or has violated any other law
in the course of engaging in the business of a litigation funding
company;

(ii) provided materially incorrect, materially misleading, materially
incomplete or materially untrue information in the registration
application;

(iii) failed to comply with the requirements of this article or any
other applicable provision of the banking law or the insurance law;

(iv) used fraudulent, coercive or dishonest practices in the conduct
of litigation funding company business;

(v) improperly withheld, misappropriated or converted any monies or
properties received in the course of business in this state or
elsewhere;

(vi) admitted or been found to have committed any unfair trade
practice or fraud; or

(vii) had its registration, or its equivalent, denied, suspended or
revoked in any other state, province, district or territory.

(d) Upon the revocation or suspension by the superintendent of the
registration of a litigation funding company, the superintendent shall
forthwith notify such litigation funding company. The revocation or
suspension of any registration pursuant to this section shall terminate
or suspend, respectively, such registration immediately upon the
issuance of such notice.

(e) All litigation funding contracts entered into prior to the
effective date of this article are not subject to the terms of this
article.

(f) A litigation funding company that has filed an application for
registration with the department, within one hundred eighty days of when
the department first makes such applications available, may enter into
litigation funding contracts, while their application remains pending
with the department.

(g) The superintendent is hereby authorized to adopt rules and
regulations to implement the provisions of this article as needed.

* NB Effective December 19, 2026